Resource Allocation

In the previous chapter we looked at a special type of resource allocation problem, that of allocating time among project tasks, better known as scheduling. Now we consider the allocation of physical resources as well. Also, we are concerned with using resources in both individual and in multiple, simultaneous projects. The subject relates directly to the topic of scheduling because altering schedules can alter the need for resources and—just as important—alter the timing of resource needs. At any given time, the firm may have a fixed level of various resources available for its projects. The fixed resources might include labor-hours of various types of special professional or technical services, machine-hours of various types of machinery or instrumentation, hours of computing time, and similar scarce resources needed for accomplishing project tasks. For example, if the need for some resource varies between 70 and 120 percent of resource capacity, then that resource will be under utilized (and wasted if no alternative use exists) at one point in the project and in insufficient supply at another. If the project schedule can be adjusted to smooth the use of the resource, it may be possible to avoid project delay and, at the same time, not saddle the project with the high cost of excess resources "just to make sure."

This chapter addresses situations that involve resource problems. We discuss the trade-offs involved, the difference between allocation to one project and allocation between multiple projects, the relationship between resource loading and leveling, and some of the approaches employed to solve allocation problems, including the Critical Path Method (CPM) and several other well-known techniques. Although CPM is not actually a resource allocation method, we include it here because we view time as a resource, and trade-offs between time and other resources are a major problem in resource management. Finally, we note the major impact that current project management software has had on the PM's ability—and willingness—to deal with resource loading and leveling.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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